Hostway and Hosting, two hybrid cloud managed service providers, are merging to beef up their joint international services for enterprises, the two companies said Tuesday.

The combined company will provide support to IT organizations that are changing their roles, Emil Sayegh, CEO of the combined organization and previously CEO of Hostway, tells Light Reading. "The IT department is becoming more of a broker for vendors than doing a lot of the work themselves. We complement them nicely in helping with that digital transformation." CIOs are brought in to reduce cost and risk, but their real role is increasing business agility -- launching products faster and improving communications. "The problem is that they never get to that true mission, which is improving agility. Hostway takes on operational responsibility to free IT to innovate," he says.

The two companies have similar cultures and complementary expertise, Sayegh says. For example, Hostway had strong expertise in Microsoft Azure while Hosting.com was strong in Amazon Web Services Inc. Combined, the two companies have 14 data centers in five countries on three continents.

Figure 1: Hostway CEO Emil Sayegh

The combined organization will provide managed services for IT running in the providers' own data centers, AWS, Azure or on the enterprise customer premises, Sayegh says. Specifically, the combined organization will offer security services, compliance, database administration and sysadmin services, as well as assist enterprises with digital transformation.

The combined organization will serve large and midsized companies in healthcare, financial technology, media and manufacturing. Customers include Fox News, Publishers Clearing House, and FAGE Greek Yogurt. (Editor's Note: Light Reading avoids bias in all coverage -- except yogurt. We love Fage. Got a whole shelf of the refrigerator devoted to the stuff.)

Sayegh declined to disclose terms of the merger, but said revenue would be close to $200 million, and employee count close to 1,000.

The combined company sees its top competition as Rackspace, as well as managed service providers, Sayegh says. (See Masergy CEO: How We'll Get to $1BN , Rackspace climbs the cloud stack, Rackspace Snaps Up Salesforce Specialist RelationEdge and VMware Wants You – Yes, You! – as a Cloud Provider.)

Investors Littlejohn & Co. LLC and Pamlico will stay on to equally back the combined entity, Hostway says.

The two companies will continue to operate under separate brands and operational models for a limited period during integration and intend to fully merge all functions and operate under a single brand within the next 12 months, the companies say.

— Mitch Wagner Executive Editor, Light Reading